Commissioner says the 1998 lockout might be a good lesson, because it shows what can happen.

NBA Commissioner David Stern has a message for the players' association: The system is broken and needs to be fixed.

That was the most telling theme to come out of Stern's 30-minute session with reporters Saturday, an annual briefing dominated by questions about the looming owners' lockout.

Stern said earlier this season that owners were projecting losses of about $350 million, and though he didn't provide updated figures Saturday, the losses were palpable, he said.

"The numbers are real, the losses are real, and the need from our perspective for a different business model, that's what's governing our decision," Stern said.

The owners and players met amicably Friday in Beverly Hills, though the sides still seemed far apart as the current collective bargaining agreement moved closer to its June 30 expiration.

Stern tried to sound optimistic.

"I would say what gives me hope is the fact that a lockout would have huge negative consequences for everybody," Stern said. "That's what gives me the hope and the belief we are going to knock ourselves out to get [a new CBA] done. At this point, the owners know what their numbers are and what they need to do, and I think the players are beginning to understand it."

Forbes magazine recently reported that 12 of the NBA's 30 teams lost money last season.

The NBA went through a similar situation in 1998, the players and owners taking several months before agreeing on a new collective bargaining agreement, leading to a shortened 50-game season.

"We had a huge gap back then and we have a huge gap now," Stern said. "But you work hard to close it. Of course, we are smarter now than we were then. We've already had a lockout. We know what it feels like."

What was learned from that lockout?

"I think what we have learned and what the union has learned, is that we both have the capacity to shut down the league, that there's no magic that's going to keep the league operating if we don't make a deal," Stern said. "That's a very instructive lesson."

Stern declined to go into specifics about negotiations, which include the owners' demand for a hard salary cap, but he often came back to the importance of a revenue-sharing model.

"I think it would be a good thing if more teams could compete," he said. "We are very focused through revenue sharing and this deal, this agreement that we're trying to get, on having small markets with the capacity to compete in this league and succeed in this league," he said.

There were other topics touched upon in the interview.

Stern was asked if the Sacramento Kings were talking to an Orange County entity about moving the franchise to Anaheim in coming years.

"I don't know whether [talks] are ongoing," he said. "No one has told me that they have been tabled and no one has told me that they are ongoing."

The NBA might look into creating a "franchise tag" for a player on each team, somewhat similar to what the NFL has in place.

AEG, which owns Staples Center and is trying to bring an NFL team to Los Angeles, had conversations with the NBA about acquiring a franchise in Kansas City, "but at the present time, there doesn't seem to be an ownership group for that city," Stern said.